Interview with Chris McCann, Partner at Race Capital
4 of his favorite Solana projects, why Solana has a bigger target than Ethereum, and much more
For today's newsletter, we interviewed Chris McCann, General Partner at Race Capital, one of the most active venture capital firms in crypto, particularly in the Solana ecosystem. Chris is a thought leader we deeply admire and has been a prolific investor, with a portfolio that includes Binance, Solana, and Serum.
To start with current market conditions, how do you see crypto markets today? Are we going into a 4-year cycle again?
For years people in the crypto space were waiting for developer adoption, institutional adoption, and consumer adoption - and we are finally at the point where we are seeing meaningful progress on all fronts.
Regardless of all this short-term volatility, the future has never looked brighter for founders.
On smart contract chains, how do you see their progress moving forward? In particular, Ethereum, Binance Smart Chain, and Solana?
Ethereum has the biggest incumbent ecosystem, Binance Chain received a lot of throughput when transaction fees skyrocketed, and Solana is the most promising layer one protocol that has the potential to scale to billions of users and applications.
In particular, Solana has progressed tremendously over the past few months and the level of developer enthusiasm is palpable.
Talking about Solana, what projects and tools are you most excited about in its ecosystem? Are there ones you like where they wouldn't even be possible on other chains, due to high fees?
I’m excited about many of these new infrastructure layers being built within the DeFi space and recently wrote a deep dive post covering this > https://medium.com/racecapital/defi-infrastructure-101-overview-market-landscape-78e096a85834
In terms of projects that are only possible on Solana there are a handful that stick out including:
Saber - AMM system with a fully integrated router system that can connect multiple pools together through a singular transaction
Solend - Autonomous interest rate protocol using standard and unique collateral types
Switchboard & Pyth- Real-time oracle systems where all of the market data itself is hosted on-chain.
Zeta - The world's first undercollateralized options trading platform
The low-cost transactions, fast confirmations, and high throughput Solana provides open up an entirely new design space for developers to utilize.
Do you see Solana overtaking Ethereum in the medium or long run? What would be the catalyst for that to happen?
The ultimate challenger I see for Solana is not Ethereum per se, but rather all of the legacy financial infrastructure on which our current financial applications are built upon.
If we can bootstrap a whole new generation of financial applications processing serious amounts of transaction volume - the terminal value of the protocol will be orders of magnitudes higher than what it is today.
Even with the Solana ecosystem growing, there is one potential risk to SOL, the token: Solana's super-low fees, which while great for user experience, could lead to value not being accrued to SOL holders. What are your thoughts?
In addition to holding SOL for transaction needs, there are many other use cases for SOL including staking rewards, collateral for DeFi, and providing security guarantees for all of the applications built on top.
To me, more fees do not equate to more token value but we should rather be optimizing for total network usage.
There are some tokens, like Serum, with a total supply market cap in the tens of billions; are those overpriced? Should Serum be worth more than SOL and FTX?
Serum sits at a very unique place within the Solana ecosystem and has the potential to accrue value across all of the financial applications in the Solana ecosystem through its networked liquidity mechanism.
Also, another point to keep in mind is the lockup for the early participants of Serum was for 6+ years, so everyone involved in Serum is very long-term oriented.
Solana's base layer doesn't have privacy features like Monero or Beam. What are your thoughts on that? Are there projects you like building privacy on Solana?
I haven’t seen any projects building a privacy layer on top of Solana yet but would be great to see this area being explored.
To ask the Peter Thiel question, what is the most important thing you believe in, that most people in crypto disagree with?
Right now I believe most people treat DeFi and fintech as two separate ecosystems. However, in the near term, I believe these two sectors will collide and one of these ecosystems will have to subsume the other.
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We very much thank Chris for his time. To learn more about him, check out the links below:
Chris McCann
Linkedin: https://www.linkedin.com/in/mccannatron/
Twitter: https://twitter.com/mccannatron
Newsletter: https://chrismccann.substack.com/